♪ good thursday morning. welcome to "squawk alley." i'm carl quintanilla what a pleasure to have kayla tausche back at post nine this morning. >> someone spent way too long on that animation >> morgan and john have the morning off. obviously, a big day following that fed meeting yesterday we're going to watch slack here as well, set to make its debut at the nyse. our bob pisani is inside post five with all the latest good morning, bob. >> we have a new range here, 33 to 36. joe mccain, head of execution at citadel securities are we closer?

>> we're getting closer. it moved up a little since we spoke a few minutes ago, so we reindicated the range, $33 to $36. and it's about 10 to 15 million shares in that range that are paring off and it narrowed to $3 from $4. so i think it's shaping up >> and we don't -- as we said before, we don't know how much is actually going to be sold right now, but 10 to 15 is not a shockingly large number. >> it's a -- well, it depends on how you look at it in the context of the number of shares that are eligible to sell, it's about, you know, in the 10% range. >> but that's fairly typical, 10% for an ipo, and this is not an ipo, it's a direct listing. what's amazing to me, it doesn't matter, direct listing, ipo, whatever you want to call it, this year ipos are tending to price toward the high end and open above this is happening here if we take 33 to 36, pick a number 34 if it might open, that's 30% over the reference price average ipo in my experience, maybe would open 10% higher on a good day we've seen ipos routinely

opening 20% higher and here, perhaps, 30% >> yeah, i think we're in a healthy range to potentially open we just need the rest of the interest to firm up before we're going to be in a position to open up. >> now, what do you -- right now, is this final process any different than a normal ipo process at this point? when you're really just trying to pare off? we don't have the shares that are underwritten out there, but the process of paring it off is similar. >> it's very similar it's just, maybe, takes a little longer, like we said it's coming in over a longer period of time but the process is basically the same one >> and the outlook is looking very similar to the rest of the ipo. so te coo point here, direct listing, still a way of going public, just like an ipo process. and we're still seeing similar first-day pops this hasn't happened yet, but it's moving in that direction. >> it's getting there quickly. we'll keep an eye on all of this here and i think we're getting a little bit closer and maybe we'll open a little bit before spotify, 12:45 maybe a little experience helps. we'll keep an eye on this and be here all throughout the morning. back to you. >> bob, we can only hope

thanks sticking with slack, let's bring in business insiders henry blodgett, an early investor in slack, and our own leslie picker here at post nine. henry, it sounds like you're impressed with the recurring revenue model. >> this is a great business. and watching it take over our company was amazing. we had a newsroom where everyone talked to each other suddenly the newsroom got totally silent and i was noticing that my e-mails took a lot longer to get responses to nobody was checking. where'd everybody go?! like, dude, you're an old man. join slack everybody's on it. so it has just taken over all the metrics look great it's an incredibly high-margin business ultimately. like atlasian, like salesforce.com and others, just an incredible business >> glenn, what is the market here d.a. davidson put out a note that says that the market is 1.5 billion users. they said messaging is viral

whatsapp taught us that. is that what slack could eventually come, from 10 million to something like $1.5 billion is that realistic? >> well, i think if you look at what's driving slack's growth today, if you're a large company, you really need to drive innovation in your business, become more responsive to customers and slack is really a tool that helps you do that, just as henry mentioned. you can communicate one to one across work groups, across teams, across functions or even across whole companies very simply and easily within slack and the platform itself is also very powerful, because it brings in data from lots of other business applications in a very rich and integrated way. so i think the market for slack is huge as a result, because large companies are really driving towards innovation and slack is a real big, important piece of that puzzle >> what do we think -- glenn, are we talking existential threat to email as we know it? >> i do think from an internal email standpoint, as stewart said earlier on your show, stewart butterfield, the ceo,

you know, email is reducing in volume as slack is increasing in volume so that is definitely play number one for slack it's the drive into internal email. over time, if slack is truly even more successful, they'll cross company boundaries and start to attack, you know, external email, as well. but for now, internal email is definitely under assault with slack. >> but henry, the company that's under assault from that is microsoft. so what's stopping microsoft from introducing a slack killer and putting it in its stack and having all microsoft users start using it >> they're late. it's network effect business once a company adopts it to pull it out and switch to something else is very difficult i would say it's ultimately going to be complimentary to email. we still use email we use it a little bit differently. people still talk on the phone, believe it or not. all of these different communication mechanisms just sort of layer in, they find a niche. we need all of them. but it is certainly taking over a lot of what we used to do with email. >> certainly the relationship they have with

consumers is feeding their awareness, which is why we're having this direct listing in the first place, right >> exactly if you didn't know that slack existed, it would be hard to be on the buy side of today's direct listing, because you don't use it you don't know anything about it that's why only certain companies, companies like slack and spotify, that have ample capital raised currently on the balance sheet, slack has $800 million in cash right now, so as stewart butterfield said this morning on "squawk box", they didn't need to do a capital raise. the listing was more just to allow -- it was a liquidity event for employees and previous investors to just have an opportunity to sell their shares >> so leslie, what does a textbook performance for a director listing >> it's a good question! >> we don't have that many data points normally you would take a traditional ipo and say, if it was priced well, it would rise 15 to 20%, stable trading throughout the day, no major glitches, no major drops or pops but what is a perfect day for slack? >> i think that's a really good question, because you're right, we can't do the money left on

the table question we're not really looking at performance. i mean, we're looking at it relative to the reference price. we're looking at it relative to where the shares were trading on the secondary markets. and so far, at $36 a share, it would be up about 35% from both the reference price and the average price they were trading at in may. but i would say success would be, you know, relatively low volatility, no major technical glitches we should look at this more from a technical standpoint, as opposed to a performance standpoint because, really, where they close today is going to be the first major data point in the public markets, because the shares weren't sold at an ipo price. >> glenn, as an earlier investor, i'm sure your returns are going to be handsome, but does it matter to you how you get your exit, whether it's through a direct list organize an ipo >> you know, ultimately, the performance of slack and its stock price over time is going to be a result of how they do financially. and so, you know, the direct listing is certainly an interesting feature to the slack

debut, as was mentioned, they have a bunch of cash on their balance sheet, so they didn't really need to raise money in this event and because people know the product, the marketing that comes along with an ipo wasn't that important to them so i'm really more focused on how does the company perform over the next ensuing quarter twob quarters, three quarters and years out. i think the opportunity is vast, as i mentioned earlier and that's what the big story is here about slack >> so, glenn, a company saying, we don't need the money, how close does that tell you that they are to profitability? >> well, look, they've got over $800 million of cash on the balance sheet. and you can look at their quarterly results, as henry mentioned earlier, gross margins in this business are very significant. and from a go-to-market standpoint, the company is quite efficient. so there really is reason to believe that slack will be a very profitable company. just like other cloud software businesses that have proceeded it, you know, gen one companies.

>> two quarters, two years, two decades? >> i don't think it's decades away, by any stretch i think they will be profitable on this cash if they had any doubt about that, i'm sure stewart would have considered raising money in this event >> and this is a business where it's actually smart for them to use huge marketing spending, get out there, get into companies, build the base, over time, many years down the road, you can begin to dial back and suddenly you're wildly profitable this is what salesforce did, what amazon has done, many others this is a case where if you're on the board, it's like, keep going for it get into these companies now it's worth it. you'll get the return on the cash >> sorry, i was going to add to that point i think it's a really good point. remember, slack's reported net dollar retention, or think of that as sort of same-store sales growth of over 130% per quarter for the last couple of quarters. so they just need to turn the lights on and the business has been growing more than 130%.

so get market share now, because it will be worth a lot in the future >> don't they have giants to worry about, facebook, workplace or anything like that? >> sure, but they're a point product. this is all they do. they have a huge lead, they have a huge brand lead. it's just a tough sell to create this from scratch and go in, what are the advantages. and also, the other big trend here that they're taking full advantage of is what you would describe as consumerization of the enterprise individual employee groups suddenly adopt this. then they spread virally within the company. completely different model than lobbying the cto for years to install some megaclie client software server program. and they're already in these organizations. look at thenumber of free user versus paid users, that's their future pipeline. >> and stewart butterfield's story is truly remarkable, which i'm sure we'll talk about more later in the hour. henry, leslie, glenn, talk to you soon >> great to be here. the big earnings mover this morning, oracle leading much of

the tech sector to the upside. josh lipton joining us from san francisco with more on what's moving that. josh >> so, kayla, heading into this report, remember, some analysts had actually been a bit nervous about oracle's results, highlighting potential currency challenges but larry ellison's company here managing to beat expectations on the top and the bottom the stock now up more than 25% on the year. revenue increasing 1%. the company saying sales will grow more than 2% in the current period mark hurd is competing hard with big rivals like amazon and that has led to some interesting strategy shifts, for example, just recently, announcing that new cloud partnership with microsoft. remember, there are two big segments for oracle. revenue from cloud services and license support. that's the company's largest division it was unchanged at $6.8 billion. that includes cloud revenue, but also includes maintenance fees and traditional software it's other on-premise license

sales that dropped 12% hardware dropping 11%. here is ellison on the call. >> some of our businesses that are not hot, but the good news is the hot businesses are now bigger than the not-so-hot businesses and that's determining our future >> so boston line here, what does this report tell us about oracle's quest to become a true cloud powerhouse i checked in with evercore's kirk matenner this morning there is clear evidence that some of its cloud business is gaining traction, especially on the application side on the infrastructure side, though, where hurd is competing with jeff bezos and satya nadella, there's still a big question about whether the growth we saw this quarter is indeed a sustainable trend but investors you see voting this morning and moving that stock sharply higher kayla, back to you >> nearly 9% thank you, josh. see you a little bit later this hour a big show on "squawk alley," still ahead, sherrod brown is with us to tell us why

he's critical of facebook's new crypto offering. and still a lot more to come on slack as we await for the first trade. citadel telling cnbc 12:45 is the upper bound for that trade we'll see if it happens this hour "squawk alley" will be right back

dow and the s&p have now wiped out their losses from may. the s&p set an all-time high earlier this morning, up 10 and 13 and oil is up big on this news that a meeting on iran is about to take place at the white

house. art cashin is here at post nine. it's good to see you >> thank you >> our friend from rbc says if it weren't for the permian, we would be above $100. >> i think that's probably right, but the permian has made a world of difference. we're a major, not just swing producer, but we're a major producer now i think you've got something strange going on over there. obviously, in an all-out military conflict, iran couldn't supplant the united states, but i think they're playing a different kind of game the president has said over and over again, he does not want to put u.s. troops at war in the middle east. so i think iran thinks they've got a little wiggle room there, they can push a little harder and push a little further to see if he will be restrained from doing anything so it will be interesting to see what kind of response it is. the good news, obviously, is that it was a drone, there was no loss of life. so that would have changed the odds greatly

but the bounce in oil is modified, because of the fact that we're producing so much >> do equities respond to this whole situation out there or not? >> it depends on what kind of response you see you know, for now, the geopolitical shift is mainly toward the trade talks, again. president xi deciding suddenly to visit north korea, tells me he's looking to pick up a chip there that trump won't be able to refuse, so when he walks in, it will be less about trade goods and more about, i can do this for you in north korea. so do you want to back off on some of your demands >> or perhaps there's going to be some movement on north korea with president trump visiting south korea, tagged on to the g-20 next week do you think investors are misplacing their expectations for volatility because the focus has been on china. and it's been on trade and now we see these tensions ratcheting up in the middle east, the president tweeting, iran made a big mistake.

so how do you think they're pricing this in? >> well, as i said, it depends on what the response will be so far, they're just calling a meeting. as i said, i think most traders see it the way i do, that the president is reluctant to do anything militarily, at least massive militarily in the middle east so he will remain restrained so the concentration will remain on things like the trade talks and where we go from there but we can't afford to let it drag on too long first of all, the president can't afford it, because you've got the election coming up but if you looked at some of the great reports and other things that we've seen, the slowdown in the global economy is reaching this shore and if you continued to slow down at the rate we've slowed down in the last two months, by the fourth quarter, you could be border line recession. obviously, if you're running for office, you don't want that. >> it leads me to the last question here. we see bad news as being good

news, in light of the fed, that all makes sense. when does bad news become bad news again >> well, first of all, it's something large scale militarily would happen that would clearly be bad news but i think you're probably getting to that, again, the central banks around the globe are all collectively moving preemptively talking about lowering rates they're not going to wait for a slowdown they're going to try to cut rates ahead of time. now, the bank of japan staid pat, but coroda said they'd be willing to cut again they're already at negative rates. the eu is already at negative rates when you had dry heat come out. so at some point, trying to get lower on negative rates is going to have a counterproductive effect >> art, we'll talk to you soon thank you. art cashin is made in america still an option that's a question that many u.s. business owners with significant overseas exposure are now

offering and in washington, hundreds of companies testifying against a new round of potential tariffs joining us now to discuss that is the president of new york-based textile company, scott goldstein. thank you for being here >> thank you for having me >> so first, tell us about where you stand in the trade war as it is right now are your products currently subject to tariffs >> right now, we're not. we are on list four, which would be the list of everything going to 25% tariffs right now, we have not been trif tariffed >> which is what secretary mnuchin by design will have the biggest impact on consumers. >> that's the unfortunate thing about this whole circumstance. we're a business that has been around for 86 years. and we used to run a sewing operation in the united states, but unfortunately, that's been gone for 20 years now. there's no more weaving, dying, or any way to buy fabric to make a curtain in the united states that's been long gone. our only source of product is

china. if you look at the hts code for where our goods come from, ready-made curtains, 95% of them come from china. so passing this tariff on will only be a tax on the consumer. >> so if the president says, companies who don't like these tariffs should just move back to the u.s., that's not an option for you? >> it's really not an option like we said, we can't even buy the raw materials here anymore i don't even know where we can buy thread we used to run a sewing operation, so we would probably be able to start this up, but i don't even know if we can find skilled sewing operators anymore, if they even exist in this country, and it's the raw material that is not available for us to get. >> but you would argue, the inventory is the more critical question the labor, maybe you could find a way, steal some workers from somebody >> the labor is maybe a possibility. it's the raw materials so if we wanted to make it here, we would so to buy the peace goods from china which would be tariffs and counterproductive. so that's why the tariffs have been such a hindrance to us, our

customer, and really to the american consumer. >> how about supply chains, ex-china, but in asia. >> i've been to vietnam, we buy a little bit out of pakistan a little bit out of india but there's a reason that 95% of our product comes to china, it's because they've invested over the last 20 years in all of the weaving and dyeing equipment that used to be in the united states, they've done it and built up the supply chain that enables us to buy this product at a great price that we pass on >> if there's no breakthrough next week and the president moves forward with these new tariffs, what actions would you then have to take? >> we would have to go work with our customers to the best of our ability. >> so target, walmart, kohl's. >> big lots, family dollar, wayfair, amazon. we're a large supplier to every major retailer in the united states and we would have to do our best to work with them on price, but we would have to pass some of the cost on, because it's too big, and they would have to pass it on to the consumer >> yesterday, ambassador

lighthizer told members of the house ways and means committee that economists have a hide bound notion that this will be passed on to consumers and that they will foot the bill. he said, i don't buy it at all what would you say to that >> i would have to disagree with the ambassador it's just not possible textiles is a very low-margin business there's no way for us as a supplier or the retailer to absorb totally these type of increases and not pass it on we'd all have no margins and be out of business. it is going to pass to the consumer there's no other way around that >> we'll see what outcome we get in the next few weeks. >> scott goldstein from li lichtinberg. and the s&p setting an all-time high earlier. we told you about oracle earlier. hollyfrontier, mobile energy, and tech really reading the rally.

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got a new indication for slack. a bit of a tighter range bob's inside the post. >> so we're talking joe mccain, 35.50 to 36.50. >> we've tightened a dollar. it's moved up a little bit there's, you know, about 20 million shares that are pared off in that range, but we're still seeing a lot of interest come in, so we'll let it stabilize here for a few minutes and see where the price moves. >> so i heard pete say, all right, let's everybody breathe a little bit that means, let's take a pause and -- but we're within a dollar >> yeah, we're definitely getting closer a lot of people are watching this as a sign of what does it mean here. so we had a $26 indicative price, we're talking $35.50. let's say $36. we're talking $35, 40% higher here is this because the ipo market is astonishingly hot or direct listing has been very successful is this a good sign for ipo business is it a good sign for the direct listing concept? >> i think it's a good sign for everything it's obviously, people are

taking a strong interest in slack, as a company, which is good i think it's a good sign for the public markets you know, so we're excited to be associated with it >> a lot of people have noted that, fairly tight concentration of ownership here. six holders essentially control about 60% of the company some of them are restricted like the ceo, but a lot of people could potentially sell or not sell they could simply withhold and say, this is doing great, i'm not going to sell my shares right now. we still don't know. this all looks pretty quiet, but we don't know how volatile the stock will be. >> this is why it takes as long as it does part of it is taking that extra time for letting sellers decide whether they want to participate or not and once it opens, we'll really know where people decide to participate. >> we're getting closer, kayla, calm before the storm. but like i said, we still don't know how much people actually want to sell out there we'll keep an eye on all of that getting close. kayla? >> we're now $4 above where slack ever traded on the private market so certainly a good indication there. meanwhile, european markets set

to close shortly seema mody has that at corporate. >> the federal reserve's announcement sending global markets higher we're looking at european stocks, up about half a percent, even though the bank of england, unlike the fed and ecb is sticking to its view that further rate hikes are likely, albeit at a gradual pace the pound getting a lift today it's touching 127 i believe against the u.s. dollar, and the yields -- 126, there we go and with yields continuing to move lower, it's worth noting that the value of yielding bonds just hit a record high of $12.5 trillion, surpassing the peak hit back in 2016 turning to sectors, travel and transportation stocks in focus, hsbc warning that other european airlines could follow lufthansa's footsteps by reducing its guidance saying that airlines have been able to discount ticket prices carnival cutting its full-year company outlook.

the company ceo specifically citing a deterioration in the business environment in italy and pricing pressures in germany, adding that the confluence of events in europe have, quote, overwhelmed the u.s. and shares of carnival are down in today's trade by 10% carl, sending it back to you >> seema, thank you very much. let's get to sue herrera as well get a news update on a busy news day. >> it sure is. here's what's happening at this hour, everyone russian president putin says he is ready for a meeting with president trump, but does not expect a quick improvement of russia/u.s. ties speaking during a live call-in show, putin says the two countries need to talk about arms control syrian rescuers known as the white helmets say government air strikes killed 16 people in the northwest. that's the last rebel stronghold in that country. that includes two ambulance workers and several children the attorney for the man accused -- who has accused actor kevin spacey of groping him says the man's cell phone, ordered to be turned over to the defense, cannot be located.

the judge is giving the accuser until july 8th to produce the phone or explain what he knows about its whereabouts. and working long hours may be bad for your health french researchers examined data from 143,000 people aged 18 to 69 and found those who worked more than ten hours a day more at least 50 days a year were more likely to have a stroke the risk increased if they worked those hours for at least ten years. i don't like that survey i don't like that research carl, back to you. >> sue, occupational hazard. thank you. when we come back, senator sherrod brown joins us on facebook's new krcrypto offerin. in the meantime, watching slack. we're a hundred points off the session high and the vix is green. this will be interesting to watch. back in a minute >> digital currencies are in their fantasy.

essentially, not too concerned about, you know, the central bank's no longer being able to carry out monetary policies because of cryptocurrencies or digital currencies facebook, i believe, has made quite broad rounds in -- around the world, really, with regulators, survivors, and lots of people to discuss their plans. and that certainly includes us ♪

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facebook's libra cryptocurrencies picking up

steam. regulators from the uk and india among those pushing back while those in the united states, the senate banking committee scheduling a hearing next month to talk about it joining us first in a cnbc interview is the ranking member of that committee, senator sherrod brown of ohio. senator, good to have you. good morning to you. >> good to be back, thank you. >> really all we have to work with right now is this white paper. what kind of questions do you have >> well, we start with -- you know in the country feels increasingly that way that facebook is too powerful we are skeptical when we hear of facebook running what we think and i think i speak for senators in both parties and for most of my constituents in ohio, that running a risky cryptocurrency operation out of a swiss bank account, and essentially, it's unregulated. so there are no rules. facebook, we know -- they've earned the skepticism, perhaps the cynicism that people have

about them and their operation we will have a lot of questions, we want to know how they're going to do this we want to know what kind of -- we want to figure out what kind of rules we can put in place the world currency system has taken decades, maybe centuries to build and somebody like facebook with the power of the market that they have is a concern to us >> senator, you mentioned that facebook that has earned skepticism how much of this pushback is the nuts and bolts of this specific product? and how much of it is just the fact that congress doesn't believe that facebook has its existing products under control? >> well, it's all that it's the newness to the public of the whole idea of cryptocurrency, the fact that it's unregulated, by and large, and the u.s. has moved slowly. the fact that we have a white house that looks like a retreat for wall street executives i mean, this white house always comes down on the side of wall

street and the largest corporations in the world and has shown no real interest in reigning in these big tech companies as they get more voracious and hungrier, and more profitable and more willing to do things that are not in the public interests, but are in their personal interests and so, we've -- that's why the senate banking committee has got to take this up. you've got a white house standing on the sidelines and a huge increasing, fast-growing company like facebook coming to play this way. >> well, the federal reserve is an independent regulator and fed chair jay powell said yet that it met with facebook if the fed didn't see reason to stop facebook from announcing this and gave it the green light to go ahead, why should congress take issue >> well, congress should take issue because we represent the american public and the american public is increasingly concerned about the power of facebook and increasingly unaware of what can happen with these risky

cryptocurrencies coming out of a swiss bank account that sentence alone strikes enough fear, more than concern in the minds of a whole lot of people in this country that saw what happened ten years ago, when our financial system went -- when wall street malfeasance and overreach and greed brought our economy almost to its knees we don't want to -- an unregulated, huge, fast-growing facebook with its cryptocurrency out of a swiss bank account coming in and wreaking the kind of havoc it could. we don't know those answers yet. we don't know their plans yet, but they're moving a year from now, so we've got to be ready. >> does the partnership structure with companies like uber and mastercard and square make it anymore palatable to you, at least in the early going, to have a first conversation >> well, i'm always willing to have the first conversation. it doesn't allay my concerns,

nor does it allay the concerns, with i think, of large numbers of senators in both parties on the banking committee here and off the banking committee. nor the concerns of 12 million people in ohio whom i represent. so -- and you know, i don't necessarily trust the -- i mean, the credit card companies, wall street, i don't want to cast too wide a brush, but again, back to the collective amnesia that far too many on this committee behind me seem to be experiencing to deregulate much of the financial sector, when it was the financial sector that almost brought the economy to its knees ten years ago. so this is all related and facebook forming alliances with some of the players that helped the hurt the economy a decade ago doesn't at all allay my concerns >> so what's your desired outcome here, senator? is this a fact finding mission, do you hope to introduce legislation for these type of instruments or do you want to stop facebook from being able to roll this out?

>> i don't know the answer to that i want to know more i think you start -- i think the public needs to know more. the point of congressional hearings is certainly to inform members of congress, but it's also to inform the public. we know this will get wide play on cnbc and elsewhere. and that's important we need, we want to bring in the regulators to figure out what they're going to do. i am generally skeptical of trump administration regulators, because they have almost always been in the pockets of wall street and the big players in the financial system i don't know their relationships with big tech companies, but the public has been unrepresented in all of this, frankly so often when it comes to wall street and now with these big tech companies, and that's my job to make sure the public has a seat at the table, that my 12 million constituents in ohio and 300 million plus across the country have -- are more aware of what this is and more

prepared for what might happen >> finally, has the committee established a framework for how they think digital payments will evolve we're not going to use cash and credit cards forever and we have a whole generation of americans who are still unbanked and might look to this as a solution. >> well, you're going to hear facebook talk about their empathy for all the unbanked in this country, i'm sure they're going to do that i'm a bit mistrustful of the everyone thmpathy that they pred i know facebookfinds a new opportunity here and they're a private company and more power to them but just like us and how i fight every day to make sure the polluters stop polluting lake erie, i understand maybe it's in their economic interest to do that, just like it's in the economic interest of facebook to find new ways of making money, but i represent the public and in the facebook and i want them to thrive as i want companies to

thrive, but i want consumers and i want a safe economic and a safe banking system, a better economy that's good for everyone, not just a few billionaires in the silicon valley >> senator, we'll be watching those hearings you're absolutely right! we'll probably take it live. appreciate your time >> all right thanks >> senator sherrod brown >> good to be with you, thanks now to another target for congressional democrats, international taxes with democrats proposing to raise rates on foreign earnings. our ylan mui has that story from washington ylan, good morning >> reporter: good morning, kayla. well, democrats are out with a new proposal today that would raise taxes on companies' foreign profits. this idea comes from senators ron wyden, who is the top democrat on the finance committee, and chris van hollen, who sits on the banking committee. and they're arguing that the new tax system actually encourages companies to build their factories overseas instead of here in the u.s. as a way to lower their foreign tax rate and to fix that problem, they propose closing those loopholes

or perhaps creating a new across-the-board minimum tax on foreign profits. they said that a similar proposal under president obama would have raised $300 billion over the course of a decade. now, what would they do with all of that money? van hollen and wyden are proposing creating new federal subsidies that would help provide jobs for the long-term unemployed so you're starting to see this idea of going after foreign profits as a new piggy bank gaining traction on the left we saw it in senator amy klobuchar's first 100 days agenda that she put out this week that was part of that plan we also know that joe biden obviously supported this when he was vice president under obama so, guys, i would not be surprised if you hear a lot more about this idea on the campaign trail. back to you. >> all right ylan mui in washington, thanks for that meanwhile, let's get a check in on slack. we are looking at a $37 to $38 indication for that stock.

we'll see when it opens. could be happening momentarily rick santelli, i'm sure you're watching slack, but i'm sure you're also watching something else in chicago today. what's on your mind? >> absolutely! interest rates continue to be soft wonder 2% in ten-year and philly fed manufacturing index seems to back the notion that we're weakening. but does it really i don't think so tu iafr e ea -driverless cars... -all ground personnel... ...or trips to mars. $4.95. delivery drones or the latest phones. $4.95. no matter what you trade, at fidelity it's just $4.95 per online u.s. equity trade.

i'm scott wapner here's what's coming up at the "halftime report" at the top of the hour how far can the stock really go with the fed ready to cut rates? plus, former dallas fed president, richard fisher, rick reeder are with us on what is really likely to happen next and a big list of moves from our panel today. we reveal them at noon when we see you on the half. carl, we're about ten or so away we'll send it back to you. >> quite a day, scott. thanks while we wait for slack here at the nyse, over at the nasdaq, grocery outlet makes its debut and surges after its first trade a few moments ago, up 40%. so-called extreme value grocer trades under the symbol go has more than 3 hurricane independently operated stores in six states let's get to santelli exchange morning again, rick. >> good morning, carl. you know, all these ipos, all the unicorn, the way the stock market's pricing, one would never guess that one of the main issues is whether our central bank needs to ease

and it's almost not van isseven issue. markets are really building a lot in markets are never wrong. when a trade's cans mate onsumms almost always right, but to take that and project it into future, it gets dicier and dicier. the fed chairman yesterday was very clear it's just not soup yet he needs to see more well, i know one thing he could see that might be quite enlightening on the philly fed today, the headline number was up 0.3 it was the second weakest number going back to may of 2016. and the other two comps are negative numbers but let's look a little deeper if you look at future outlet, it moved from 19.7 to 21.4. and there's this category called special questions. and therein lies some golden nuggets. on q2 versus q1 production, the special question was, do you see it better or worse do you see it growing or shrinking? and i consolidated it into a

much more simple form. anywhere from 2% to 10 plus%, expansion and production almost 45% saw that 0 to 2%, and i picked 2%, because i figured if the fed could be arbitrary about 2%, so could i, was only 13.8%. no change was a huge chunk which leaves that less than 1% with regard to q2 production versus q1, was 25.7. i'm telling you, very optimistic now, for you option traders out there and mathematicians, let's go to the next derivative. the rate of change the acceleration or deceleration of that dynamic. and that was the second special question the growth pace, q3 versus q2. those that saw acceleration, 49%, no change also a big camp, 24 which leaves the deceleration camp at 26.4

this exactly backs up the issue underpinning why jay powell wants to stay pat. while other central banks think they're getting ahead of something, i say they're digging deeper into something they don't understand our fed, the norway, the norway titan and i understand, they have much more in pricing pressures over 2%. but at the end of the day, let it breathe a bit, because many of thebit. many things impacting us now might not be long term kayla, back to you rick santelli, putting that red marker to good use up next we head back inside post-five as we await slack's a but. lot more "squawk alley" coming up -driverless cars... -all ground personnel...

...or trips to mars. $4.95. delivery drones or the latest phones. $4.95. no matter what you trade, at fidelity it's just $4.95 per online u.s. equity trade.

alphabet, softbank and a host of others are sought to be big winners in slack's big debut this morning josh lipman joins us from san francisco with more including some individual names. >> reporter: that's right. who is set to rake in the big bucks from slack's stock market debut. some of the winners are tech heavyweights in their own right. we have linkedin ceo, and co-founder dave moran. forbes says at $25,000 a check each could be sitting on shares now worth about $40 million. they invested in the earlier rounds close to a decade ago stripes, patrick and john carlson, they could see returns of more than 70 times their money or 1.8 million for each

25,000 they put to work. they join in slack's series c. then venture firms excel is the biggest investor in slack. $26, its shares are worth 3.1 billion. big shareholder in crowd stripe so that's two big venture outcomes for that firm and only about a week ek sell considered a top tier firm out here. they saw one of the greatest venture outcome of all time leading the series a in facebook and horowitz owns it we're used to seeing softbank writing big checks for capital intensive companies. finally, social capital has a 10% stake with 1.3 billion it's on slack's board.

one good thing about the direct listing for all of those names josh just mentioned, no dilution for any of them thank you, josh. good to see you. >> priceless we're up 184 here coming just off the session lows off the session lows we're back in three minutes. ♪ higher expectations. the light beer you've been waiting for has arrived. corona premier. man: stand up if you are a first generation college student. stand up if you're a mother. if you are actively deployed, a veteran, or you're in a military family, please stand. the world in which we live equally distributes talent. but it doesn't equally distribute opportunity, and paths are not always the same. i'm so proud of you, dad! man: i will tell you this, southern new hampshire university can change the whole trajectory of your life.

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another check of slack, bob. are we getting close >> yes it keeps creeping hire 37.50 to 38.50 i want to remind everyone the reference price was $26 and our first indication which seems a long time ago was 30 to 34 >> it's moved up quickly again we keep seeing interest come in which is part of why this continues we're up around 40 million shares at this point which is pretty healthy amount. >> just a reference, 215 million is roughly what we're -- >> 200 million shares eligible for sale we're at 20% >> if you can float 10% at the open of an ipo that's pretty good we're dealing now with 20% >> that's right. very strong interest >> the big issue always has been with these is we don't know how

much will be sold because there's no underwriting. it's been a search for liquidity. is there enough to open it to have a fair price and the answer is 20% if you open, that's liquidity. >> definitely enough liquidity now just more making sure everyone who wants to participate is in and making sure it's stable >> it's been very orderly. it's quiet and there's a lot of back and forth, obviously morgan stanley is involved, goldman sachs is involved. talking to the big people who are providing assistance to this, but it's been a slow steady creep up. >> that's right. >> what is this saying about the ipo market in general. i know it's not an ipo or we're at a history jake high today in the s&p 500 >> it's all of those things. people expressing their interest in the company and deciding what their strategy will be at these different price levels >> we'll be back and this is going to price very, very soon it will happen i can see. five minutes we'll be back as soon as we get

really close guys, back to you. >> no one knows this process better than you. >> what a treat to be here >> meantime, settling into this range here of 170 let's get to the judge and the half we'll keep our eye on slack as well and get down to miss% as soon as it does open front and center for us a new record for the s&p 500 after federal reserve signals rate cuts are coming. this is your "halftime report" >> announcer: record breaker the s&p pops through hitting an all time high. the dow less than a percent from breaking its record high the nasdaq less than 1.5%. and the russell is out of correction territory i want to play offense >> he made that call two weeks ago. is he ng